Key Summary:
- Stay-at-home parents can build super using government co-contributions, spouse contributions, and super splitting.
- Low-income earners may qualify for LISTO, boosting contributions.
- Salary sacrificing and consolidating lost super increase retirement savings.
- Reviewing budgets and staying informed helps maximise long-term outcomes.
- Professional financial advice ensures personalised strategies
Why Growing Super as a Stay-at-Home Parent Matters
As a stay-at-home parent, you might feel that contributing to your superannuation is a challenge, especially with the demands of raising a young family. However, growing your super is essential for securing a comfortable retirement. Even small contributions now can compound significantly over time, helping ensure financial independence in the future.
What Options Are Available to Boost Your Super?
Government Co-Contributions
The Australian Government offers a co-contribution scheme to help low and middle-income earners boost their super. If your total income is less than $60,400 and you make after-tax contributions to your super, the government may match your contributions up to a maximum of $500. For every dollar you contribute, the government may add 50 cents. This scheme is a great way to increase your super with minimal financial strain.
Low Income Superannuation Tax Offset (LISTO)
If you earn less than $37,000 per year, you may be eligible for the Low Income Superannuation Tax Offset (LISTO). This initiative refunds the tax paid on your super contributions, up to a maximum of $500. LISTO ensures that low-income earners do not miss out on the benefits of superannuation due to tax deductions.
Spouse Contributions
If your spouse works, they can make contributions to your super fund. This helps grow your retirement savings and may provide tax benefits. If your income is less than $40,000, your spouse can claim a tax offset of up to $540 for contributions made to your super. This strategy effectively benefits both partners by growing your super while reducing taxable income for your spouse.
Splitting Super Contributions
Superannuation splitting allows your working spouse to transfer up to 85% of their super contributions (both concessional and non-concessional) to your super fund. This helps balance super savings between partners, ensuring that you have a substantial amount saved for retirement even if you’re not actively contributing.
How to Make the Most of Your Super
Salary Sacrifice
If you engage in part-time or casual work, consider salary sacrificing. This involves directing a portion of your pre-tax income into your super fund. Salary sacrificing not only boosts your super savings but also reduces taxable income, providing immediate tax benefits. Even small, regular contributions can significantly impact your super balance over time.
Find Lost Super
Many Australians have lost or unclaimed super due to changing jobs, moving homes, or changing names. Use the Australian Taxation Office’s (ATO) online services to locate lost super and consolidate it into your current fund. This not only maximises your retirement savings but also reduces fees associated with multiple super accounts.
Review and Adjust Your Budget
Managing a family budget on a single income can be challenging, but setting aside even a small amount for super contributions can make a big difference over the long term. Review your expenses and identify areas where you can cut back to free up funds for super contributions. The power of compound interest means that the sooner you start, the more your savings will grow.
Stay Informed and Seek Advice
Superannuation laws and benefits can change, so it’s crucial to stay informed about the latest developments. Consider speaking to a financial adviser who can provide personalised advice based on your circumstances. A professional can help you navigate the various options available and develop a strategy that ensures you’re making the most of your superannuation.
Learn more about Morgan's Financial Planning and Superannuation services.
For stay-at-home parents looking to maximise their superannuation, contact Simon Tarrant at [email protected] to discuss personalised strategies for your family’s financial future. You can also find a Morgans adviser near you.
Growing your super as a stay-at-home parent may seem daunting, but with the right strategies and a proactive approach, you can build a substantial nest egg for your retirement. By taking advantage of government schemes, spouse contributions, and careful financial planning, you can secure your financial future and enjoy peace of mind.
If you would like to discuss your family’s financial strategy please contact Simon at [email protected] or via (02) 4325 0884.
Simon Tarrant (AR: 001270872) is a Private Client Adviser at Morgans Financial Limited (AFSL 235410 /ABN 49 010 669 726). Simon is passionate about creating quality financial strategies that are tailored and customised to a clients’ lifestyle, financial goals and risk profile.
Footnotes
1. Information accurate as at 1 October 2024 and subject to change.
FAQs
- Can a working spouse contribute to super on behalf of a stay-at-home partner?
Yes, spouse contributions can grow your super and may provide a tax offset if your income is below $40,000.
- What is contribution splitting, and how does it help?
Contribution splitting allows a working spouse to transfer part of their super contributions into your fund to balance retirement savings.
- Can I make voluntary contributions to super if I don’t have an income?
Yes, but contributions must meet age, fund rules, and work test requirements.
- Is there a government co‑contribution for low-income or non-working spouses?
Yes, the government may add up to $500 in co-contributions for eligible after-tax contributions.
- Can I consolidate lost super to boost retirement savings?
Yes, using ATO online tools, lost or unclaimed super can be rolled into your current fund to increase your balance and reduce fees.
